Supply Chain Operation

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Introduction

Considering the impressive change in the prices, decrease in headcount and uncertainty relating to future stability of market, global oil and gas industry is currently experiencing challenging times. Major of its spending goes to supply. To curb this it is understandably that now they are focusing on delivering immediate cost reduction. In reference to a research done by Achilles shows that up to 80 per cent of the revenues spent with suppliers (Britain,2013). Its is therefor vital for the oil and gas company to implement a mechanism to manage risks involved in managing supply chains. Due to continuous existence of this risk, the market continues face challenges associated with pricing and volume supplied.

Every company has dreams of operating globally to spread it operation allover to acquire more profit. Though this is an advantage, it also one of the major challenges facing supply chain of gas and oil. During a debate constituting a small group of oil and gas procurement executives in Huston, they stressed this one as a major challenge (Wright, C. J, & Gallun R, 2015). They stressed on the possible challenges by land rig markets, environment become complex and chaotic. Hence transforming to a value-based strategy and less volume. Also states that the regulatory environment is raising up, as the regulatory body double in staff size in the previous year and again doubled on that year ().it transmit in the increase in the pricing.

Transportation is on the major challenge emerging from the forces of volume and pricing. As the company tries to get a better procedure on how to extract and transport the product, they get in a problem in implementing the transport scheme. In remote geographic location and complex upstream operation on deep water, pose a major challenge for the supply chain partners.

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